IRS Issues Inflation Adjustments for 2019

The IRS has issued the new limits and inflation adjustments for 2019 tax provisions in Revenue Procedure 2018-57. Below is a link to the entire notice:

https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2019

Dozens of tax provisions are adjusted every year, and the following are the top 10 adjustments you have to know:

  1. The annual gift exclusion for 2019 has not changed and remains at $15,000.
  2. The Standard Deduction is increasing at all levels:
    • $24,400 for joint filers (up $400 from 2018)
    • $12,200 for single (up $200)
    • $18,350 for head of household (up $350)
    • The additional standard deduction amount for the aged or the blind is $1,300
  3. Personal exemptions are still zero for 2019. This was removed as part of 2018 tax reform.
  4. Individual income tax brackets have been adjusted for inflation.
  5. There is no limitation on itemized deductions for 2019.  This was removed as part of 2018 tax reform.
  6. The refundable portion of the child tax credit has not changed and remains $1,400.
  7. The cost that can be expensed under Section 179 has been increased to $1,020,000, and is phased out once the cost placed in service exceeds $2,550,000.
  8. The total amount of payments and reimbursements under a qualified small employer health reimbursement arrangement (QSEHRA) has increased to $5,150 ($10,450 for family coverage).
  9. The threshold for which the Qualified Business Income Deduction begins to phase-out has been increased to $321,400 for joint filers and $160,700 for single filers (up from $315,000 and $157,500).
  10. The lifetime learning credit phase-out begins at a modified adjusted gross income of $58,000 for single and $116,000 for joint filers (up from $56,000 and $112,000).

You should consult with your tax advisor to see if any of the above adjustments affect you and your tax situation.

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